Bud Brokers // Dispensary Valuation
What is your license
actually worth?
- License scarcity and transferability
- Capped market, clean transfer
- The lease, or the building
- Term, options, consent
- Compliance history
- Nothing open
- Reconciled sales
- Four sources, one story
- Supplier mix and owned margin
- Diversified, owned
Seven things a cannabis buyer prices
Seven things a cannabis buyer prices
Beyond earnings, a dispensary's value is moved by license scarcity and transferability, the lease or building, compliance history, whether state-reported sales reconcile to the books, supplier and owned-brand margin, management that survives a change of control, and how many qualified buyers exist in that state. Two stores with identical revenue can sell for very different prices.
- License scarcity and transferability
- In a capped market with no new entrants the license itself carries value. Whether it can transfer, to whom, and with what restrictions decides whether that value reaches you.
- The lease, or the building
- In cannabis retail the location is often the license. Under three years with no options, or a landlord who can refuse assignment, is a valuation problem. Owned real estate with approvals is an asset you can sell twice.
- Compliance history
- Inspections, notices, fines and corrective actions are a matter of record and lengthen or shorten approval. A clean file is worth money. An open notice is an escrow.
- Reconciled sales
- Track-and-trace, POS, sales and excise tax and federal returns should tell one story. When they do, a buyer trusts the rest of the CIM.
- Supplier mix and owned margin
- One wholesaler or one brand carrying the shelf is exposure. Diversified supply and owned-brand margin are not.
- Management that stays
- If the owner is the license holder of record, the landlord relationship and the floor manager, the business is the owner. A GM and a compliance lead who stay move the multiple.
- Buyer pool depth
- The same store is worth more where MSOs, regional operators and cannabis capital are all active than where one buyer type dominates.
How much is a dispensary worth?
Which method applies
Which valuation method applies to a cannabis business
- SDE, after tax
- Single owner-operated stores. Earnings before the owner's compensation, adjusted for 280E.
- Adjusted EBITDA, after 280E
- Multi-store and vertically integrated operators with a management layer.
- Asset-based floor
- Cultivation, processing and owned real estate, where equipment and property carry a floor value.
- Distribution and velocity
- Brands: doors, velocity per door, margin, and whether the license behind the brand comes with it.
- License replication cost
- Awarded or pre-revenue licenses: what it would cost, and how long it would take, to win the same license today.
- Precedent transactions
- What comparable licenses actually sold for in that state, adjusted for timing and the 2025 to 2026 federal rescheduling shift.
The balance
What moves the range, and which way
| Criteria | Raises the range | Lowers the range |
|---|---|---|
| Driver 01 | License in a capped market with limited new entrants | License that cannot transfer, or transfers only with restrictions a buyer will not accept |
| Driver 02 | Long lease with options, or owned real estate with local approvals | Lease under three years with no options where the location is the business |
| Driver 03 | Clean compliance history with the state and the municipality | Unresolved regulator notices, tax liens or 280E exposure |
| Driver 04 | State-reported sales that tie to the books month by month | Owner is the only qualified party of interest |
| Driver 05 | Diversified supplier base and owned-brand margin | Sales dependent on a single wholesale relationship or a single brand |
| Driver 06 | Management team that survives a change of control | Cash handling, payroll or inventory controls a buyer cannot verify |
| Driver 07 | Banking relationship in place and compliant payments | Declining trend the owner cannot explain |
| Driver 08 | Measured local search dominance and a growing customer file |
Multiples set before the December 2025 rescheduling order embedded a tax burden that has partially lifted. Your number is not last year's neighbor's.
280E and the market
Why old cannabis multiples are stale
Transaction multiples set before the December 2025 federal rescheduling order embedded a full Section 280E burden. In April 2026 qualifying medical products were placed in Schedule III while adult-use cannabis stayed in Schedule I. Reusing pre-order multiples understates medical value and may overstate the certainty of adult-use relief. We model the company's actual license mix under current tax treatment and present both cases to the buyer.
Consultant-published multiple ranges exist and we read them. We do not publish them as a price, because a range built from someone else's deals in someone else's state under last year's tax law is not your number. Your number comes from your reconciled data, your license, your lease and the buyers we can actually put in a room.
Valuation questions
The questions every owner asks
5 answered
- 01How much is my dispensary worth?
- It depends on normalized after-280E cash flow, license scarcity and transferability in your state, your lease or building, compliance history, whether your sales data reconciles, and how deep the buyer pool is where you operate. We build a range from your numbers and current buyer behavior, not from a published average. A confidential consultation is the fastest way to get one.
- 02What multiple do dispensaries sell for?
- Consultant-published ranges exist and vary widely by market and by whether the operator is single-store or multi-store. Multiples set before the December 2025 rescheduling order should be treated as stale. We do not publish a multiple because the honest answer is a range specific to your license, lease, tax position and state.
- 03Does 280E lower my dispensary's valuation?
- Yes, on a cash-flow basis. Section 280E disallows ordinary deductions for Schedule I trafficking, so after-tax cash flow is lower than a comparable non-cannabis store would produce. As of April 2026 qualifying medical products moved to Schedule III, but adult-use cannabis remained in Schedule I and subject to 280E.
- 04Is a valuation the same as an appraisal?
- No. A certified appraisal is a formal opinion of value for tax, litigation or estate purposes prepared by a credentialed appraiser. A pre-transaction valuation is a market-based range prepared to inform a sale strategy. We prepare the latter and coordinate with credentialed appraisers when a formal appraisal is required.
- 05Can I raise my valuation before selling?
- Often, given time. Extending the lease, closing out regulator notices, reconciling your data, diversifying suppliers, building a management layer and proving local search dominance all move the range. That work is our exit planning service.
Know the number first
Get a range built from your license, your lease and your numbers.
// notice
Bud Brokers provides business transaction and M&A advisory services. Bud Brokers does not provide legal, tax, accounting, investment, securities or regulatory advice. Services and transaction structures may vary by jurisdiction. Each party should retain its own qualified legal, tax, accounting and regulatory professionals. Nothing on this website constitutes an offer to sell or solicitation of an offer to purchase any security or licensed cannabis interest.